Benchmark Raises Hut 8 Target on $9.8B AI Lease
A new 15-year lease for AI data center capacity validates Hut 8’s strategy of pivoting away from squeezed Bitcoin mining margins, prompting a major price target upgrade from Benchmark.
Benchmark has raised its price target for Hut 8 to $195 from $165, maintaining a "buy" rating after the Bitcoin miner secured a second major artificial intelligence leasing agreement. The stock jumped more than 10% on Monday, closing near $101 after peaking above $106. At its current trading level near $110, the revised target implies an 80% upside for investors.
The catalyst for the upgrade was a Monday announcement detailing a second 15-year lease for 352 megawatts of IT capacity. Located at the Beacon Point campus in Nueces County, Texas, the agreement doubles the site's contracted tenant capacity to 704 megawatts. It also fully commercializes the campus against its 1,000-megawatt utility capacity, securing a massive, long-term revenue stream.
The financial implications of this expansion are substantial. Analyst Mark Palmer estimates the new lease alone could contribute roughly $655 million in annual net operating income once stabilized. Factoring in renewal options, the total contract value for the Beacon Point campus could reach as high as $50.2 billion.
This pivot highlights a structural shift across the publicly traded crypto mining industry. Operators are increasingly converting their energy-intensive sites into high-performance computing data centers. The strategy is a direct response to squeezed Bitcoin mining margins, driven by a falling Bitcoin price and rising network difficulty. Firms with existing power infrastructure are uniquely positioned to capture sudden AI demand.
Hut 8 is not alone in this transition. Rivals including Terawulf, IREN, and Cipher Mining have recently signed multi-year high-performance computing contracts with hyperscalers like Google and Microsoft. Bitfarms has taken the most drastic step, announcing plans last year to wind down its mining operations entirely to focus on the sector.
Hut 8 is pursuing a hybrid model rather than abandoning its roots. Palmer argued the Beacon Point deal validates the company’s "power-first" approach to building AI infrastructure. The firm continues to operate its mining ventures through a majority stake in American Bitcoin, a mining venture backed by Eric Trump and Donald Trump Jr.
The company's infrastructure ambitions extend well beyond Texas. In December, Hut 8 struck a Google-backed deal with Anthropic and Fluidstack to build up to 2.3 gigawatts of AI data center capacity across the United States. Investors will seek further details on this pipeline when Hut 8 reports its second-quarter earnings on August 4.
